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  • Elaine Power

Minimum Wage and Basic Income

Tyra is a young woman living in Abbotsford, BC. She has a minimum wage job with no paid sick days and no benefits at a fast-food restaurant and shares a basement apartment with two roommates. Her income and expenses are very carefully calibrated; she can’t afford to take a day off work if sick.

As she says, $20 or $30 means the difference between being able to pay the rent—or not. At her previous minimum wage job, she was no longer scheduled for any hours after she had to take time off for medical reasons.

Tyra is among the 75% of women living on low-incomes who have no paid sick days.

Not paying low-wage employees to stay home when they are sick is one of the many ways that employers discipline workers, keeping them chained to their jobs so that they can pay for housing and food. Public health has long decried the lack of paid sick leave but now, in the COVID-19 pandemic, lack of paid sick time is deadly for low-income workers like Tyra. Many low-income workers are women; disproportionately, they are racialized. Lack of paid sick time is also deadly for low-waged workers’ families and roommates, their co-workers, and the people they ride to work with.

Basic income is not a substitute for paid sick days. But it would enable low-income workers like Tyra to walk away from exploitive work without worrying about being able to pay for rent and groceries, thus exerting pressure on low-wage employers to increase wages and improve working conditions and benefits.

Some critics of basic income also worry that basic income would subsidize employers who pay minimum wage, especially large multi-national corporate employers. But this criticism seems based on an assumption that low-wage workers won’t walk away from their jobs if they aren’t treated well or paid appropriately. Research with participants in the Hamilton site of the Ontario Basic Income Pilot shows that most of those who had employment when they enrolled continued to work, unless they returned to school or were providing care to loved ones. Of those who had a job at the beginning of Pilot, many found better paying, better quality jobs after they enrolled. Additionally, analysis of the data from Mincome, the 1970s basic income experiment in Dauphin, MB, suggests that basic income tends to push wages up. Some have called basic income a “permanent strike fund” which would help rebalance the lopsided relationship between workers and their bosses.

One of the most common objections to basic income is the fear that people will decide not to work—especially in the sort of low wage work that Tyra has. And yet, Tyra takes the opposite position. She expects that people would be MORE willing to go to work and have less anxiety about losing their jobs. She believes that having a basic income security net would give people confidence, hope, and the ability to plan for their futures. It would help low-wage workers raise their heads in dignity in their interactions with their employers, and to think about what they really want from their lives. As Tyra says, the adequate income floor that basic income could provide would enable her “to live,” not just struggle from day-to-day.

Tyra’s situation also points to some of the necessary additional components of strong social safety required to implement a successful basic income: affordable housing, public housing, public dental care, and pharmacare —along with affordable daycare and paid sick days. The Basic Income Canada Network recognizes basic income as a key component of a reinvigorated social safety net, not basic income instead of these other programs. Basic income does not substitute for minimum wage laws, paid sick days or the need to create more high-quality employment. Basic income could be financed by progressive tax reform, without any increase in taxes. And eventually, it would more than pay for itself in savings in health care, education and the justice system.

If we had an unconditional basic income during the COVID-19 pandemic, people would be able to walk away from workplaces that are unsafe, where they are at risk of contracting the virus, without fear of hunger and homelessness.

For more information:

Ontario Basic Income Network

Basic Income Canada Network

Policy Options (how to pay for basic income)

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